FTSE ticks up as defensives rise
BRITAIN’S blue chip-index edged up in thin volume yesterday as gains among defensive stocks offset disappointing trading updates among cyclicals and weak US macro data.
The FTSE 100 closed 8.44 points higher, or 0.2 per cent, at 5,766.55 points, having traded only 87 per cent of its 90-day volume average.
Some investors were reluctant to take new positions until Friday’s US non-farm payrolls report provided some clarity on the pace of recovery in the world’s largest economy.
The index pared gains yesterday afternoon after Institute for Supply Management data showed the pace of growth in the US services sector slowed more than expected in April, countering an estimate-beating manufacturing report published on Tuesday.
Defensive stocks shone yesterday, with artificial hip and knee maker Smith & Nephew topping the FTSE 100 chart on the back of better-than-expected first quarter results.
Shares in the group hit a one-month high as they rose four per cent in volume more than double the average, Thomson Reuters data showed.
Imperial Tobacco rose 2.3 per cent, helped by a target hike at Citigroup, which said the stock’s multiple was likely to expand on improving volume momentum. The shares traded at 17.6 times their expected earnings for the next 12 months, compared to multiples of more than 19 for peers British American Tobacco and Philip Morris.